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Hutchison and Optus in mobile and fibre deals
28 Oct 2001

Hutchison Telecommunications (Australia) Limited (Hutchison) and Optus today announced major mobile and fibre capacity deals that make strategic sense for both companies and will deliver continuity of service to customers.

As part of the mobile deal, Hutchison will transfer its GSM mobile resale base of approximately 260,000 customers to Optus for $43 million.

Hutchison has been reselling the Optus digital mobile service for over six years, most recently under the Orange GSM brand.

To ensure these customers enjoy uninterrupted service, Optus will pay Hutchison $10 million to continue to service customers as usual during the transfer period over several months.

In addition, fifty Orange dealers will now sell Optus's retail GSM services in NSW and Victoria.

In a separate agreement, Hutchison and Optus have signed a long-term transmission capacity deal that also includes an ongoing operation and maintenance contract. The aggregated value of this capacity deal is estimated to be over $60 million for Optus.

The transmission capacity will link Hutchison's Sydney, Melbourne, Brisbane, Adelaide and Perth operations and will support both the existing CDMA and future 3G networks.

Hutchison has also signed a Memorandum of Understanding (MOU) with Optus for the provision of national roaming services to its 3G customers.

Mr Kevin Russell, Chief Executive Officer of Hutchison and Mr Chris Anderson, Chief Executive of Optus said the deals reflected sound commercial and strategic sense for both companies.

Mr Russell said Hutchison is discontinuing GSM resale as this was a non-core business. "As we move forward we are focusing on our CDMA and 3G operations where we own network infrastructure," he said.

"We have secured a valuable fibre capacity arrangement with Optus that will support both our existing CDMA and future 3G networks.

"We are also delighted to have a MOU with Optus regarding its provision of national roaming services to our 3G customers. These roaming services are a critical requirement for our 3G launch.

"These deals confirm our commitment to launching 3G services in Australia late next year. They further sharpen our focus on our network operations where we are best positioned to deliver sustainable long-term value to our shareholders," Mr Russell said.

Mr Anderson said the deals would deliver wholesale capacity sales revenue and ongoing retail mobile revenue for Optus as well as continuity of service for Orange GSM customers.

"Hutchison's former GSM customers are high-value mobile subscribers with an ARPU of approximately $80 per month and there is opportunity to further grow the value of this base.

"This deal also makes sense for customers because Optus is very committed to GSM," he said.

"With over 3.7 million GSM mobile customers, we have the economies of scale and the systems to service these customers efficiently and cost-effectively.

"By working with Hutchison, we will seamlessly transfer these customers across so they enjoy continuity of service," Mr Anderson said.

"Orange customers need do nothing. Optus will contact them in the near future," he said.

"In the meantime, it is business as usual. They will be billed as normal. Their coverage and contracts will remain unchanged until they choose the Optus option which best suits their needs."

For customer service or billing enquiries contact Orange on 133 488.

Orange GSM customers with questions about the transfer and how it effects them can call Optus's Information Line on 1300 133 546 or visit www.optus.com.au.

For more information contact:
Marie Kelly
Hutchison Telecommunications
Tel: (02) 9964 4831

Stephen Woodhill
Optus Public Affairs
Tel: (02) 9342 7850